PURPOSE OF PRESENTING FINANCIAL STATEMENTS

Abstract

Relevance of the topic. The purpose of presenting general purpose financial statements forms the fundamental basis of the Conceptual Framework. General purpose financial statements include information about the reporting entity's economic resources, claims on the organization's resources, changes in these resources and claims, and how rationally and effectively the entity's management and strategic management body have fulfilled their responsibilities for the use of economic resources. Research materials and methods. General purpose financial statements are presented to existing and potential investors, lenders and other creditors so that they can make decisions about providing the reporting entity with resources using financial information. Although general purpose financial statements are not intended to show the value of the reporting entity, they provide information that helps existing and potential investors, lenders and other creditors assess the value of the reporting entity. Research results. General purpose financial statements provide information about the financial position of a reporting entity, its economic resources, and the effects of transactions and other events that change the economic resources and claims of the reporting entity. Conclusion. Both types of information are useful sources of information for making decisions about the allocation of resources to the entity.